VirnetX Takes $503M Bite Out Of Apple For Patent Infringement

There’s a new development in a decades old lawsuit after a jury in Tyler, Texas, ordered Apple to pay $502.8 million in royalties for infringing on VirnetX‘s patented virtual private network (VPN), according to a Cult of Mac report.

The original lawsuit, filed Aug. 11, 2010, alleged that Apple’s FaceTime and VPN On Demand features were using its patented technology. Over the years, VirnetX won various monetary awards, all of which were appealed by Apple, the report stated.

Initially, Nevada-based VirnetX was asking for about $700 million in royalties. Apple, however, was looking to pay no more than $113 million, the report stated.

VirnetX has had success in the courts, having previously won infringement lawsuits against Microsoft, Cisco, Avaya and Siemens, according to the report. VirnetX’s tendency to pursue patent lawsuits has earned it the nickname of “patent troll.” Critics have charged that the company’s main purpose is to sue big companies for infringing on patents that it owns.

VirnetX, for its part, addressed the “troll” accusation head-on in a company blog post that explained how its technology “made a genuine contribution to U.S. national security.”

“On four separate occasions … our four key patents and all patent claims in those trials have been judged valid and enforceable,” the post stated. “In addition, in two of the trials, the infringement of those same four patents was found to be willful.”

A lawsuit made public in June alleged that VirnetX CEO Kendall Larsen and other directors breached their fiduciary duty to VirnetX. Stockholder Neal Hurwitz, who filed the suit, also filed a complaint accusing VirnetX of misdeeds and seeking access to company records.

As a tech company valued in excess of $2 trillion, Apple can afford battling lawsuits. In its latest annual report released on Sunday (Nov. 1), the tech giant referred to the possible effects of legal proceedings and global regulations and how those could impact its operations and financial conditions.